California Attorney General Kamala Harris on Friday backed out of the 50-state coalition negotiating a settlement with the nation’s largest banks over shoddy foreclosure practices, further complicating the yearlong effort to compel serious changes in the industry and secure $20 billion in aid for troubled homeowners.

“Despite your diligence and our good-faith effort to reach reasonable terms with the banking industry, there now exists a proposed settlement that is inadequate for California homeowners,” Harris wrote in a letter to the two officials heading up the talks, Iowa Attorney General Tom Miller and Associate U.S. Attorney General Thomas Perrelli. “I have concluded that this is not the deal California homeowners have been waiting for.”

Rather, Harris said she intends to pursue an “independent path” by pressing forward with investigations into the abusive mortgage practices that contributed to the housing crisis.

Harris’s withdrawal comes on the heels of similar moves by other attorneys general, most notably New York’s Eric Schneiderman, who for months has insisted that any settlement over flawed foreclosure paperwork should not release banks from separate claims over how they bundled and sold mortgages to investors, a process known as securitization. States such as Delaware, Nevada and Minnesota have echoed those concerns and sought further investigation into all aspects of the foreclosure crisis.

Those heading the negotiations on behalf of the states, including Miller and Illinois Attorney General Lisa Madigan, have said that they have no intention of granting banks immunity from claims related to the securitization process, nor have they sought to prevent Schneiderman or others from pursuing broader investigations.

Rather, they say they have pushed for a narrow legal release as part of a settlement that would force fundamental changes to the ways that mortgage servicers interact with struggling borrowers — and result in billions of dollars that immediately could go toward preventing future foreclosures. They argue that struggling homeowners throughout the country need help immediately and that it could take years to get relief if states pursue separate investigations or drag out claims through the legal system.

Harris, who traveled to Washington last week to meet with bank representatives, did not see the coalition’s efforts as sufficient. “It became clear to me that California was being asked for a broader release of claims than we can accept and to excuse conduct that has not been adequately investigated,” she wrote in her letter. “In return for this broad release of claims, the relief contemplated would allow too few California homeowners to stay in their homes.”

In addition, she wrote, “at the same time we have been negotiating in good faith, foreclosures in California have surged again.”

Consumer advocates and other liberal groups, many of whom have lined up behind Schneiderman and urged other attorneys general to hold out on the current settlement talks, cheered Harris’s decision on Friday.

It’s unclear whether the loss of support from states such as California and New York, where banks could face huge liabilities because of mortgage-related abuses, could hamper the settlement that officials have been working on for more than a year. It is possible that the $20 billion in penalties that officials had hoped to extract from banks will decrease if California and other critical states do not sign on.

Miller’s office said Friday that California had made “a significant contribution” to the talks over the past year and acknowledged that each attorney general would have to decide whether to sign on to a final deal. Still, officials leading the current negotiations made clear their view that the course pursued by Harris, Schneiderman and others could harm homeowners in the short term.

“The multistate effort is pressing forward, and we fully expect to reach a settlement with the banks,” Miller said in a statement. “Providing relief after the foreclosure crisis is over would be a hollow victory indeed.”

Brady Dennis is a national reporter for The Washington Post, focusing on food and drug issues.

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